The business transaction world has revolved around third-party validation processes for each transaction to be approved. Traditional database technologies have presented many challenges in recording and validating financial transactions.
This is because many years back, the world operated solely on centralization policies or lacked the technical knowledge to operate otherwise.
This system of technology has resulted in delays in data verifications because limited people are involved in verifying all of its data one after the other. It has equally led to the vulnerability of records to cyberattacks with limited transparency.
Obviously, centralization has created many issues, such as trust, transparency, and speed, amongst others. There is a need to have a faster and safer way of exchanging data or transactions, which is probably Blockchain technology.
But how can Blockchain technology greatly benefit many companies today that need transparency, speed, and trust? This article will outline 10 Blockchain benefits for companies.
Before we look at the 10 benefits, let’s first see what Blockchain is and how it was invented.
What is Blockchain and how was it invented?
A Blockchain is a form of distributed digital ledger that stores and saves data of any kind among the nodes of a computer network. It is an advanced database mechanism allowing transaction data or information sharing within a business network. It basically works on the peer-to-peer principle whereby each node or user has a copy of each transaction.
Blockchain is popularly known for its crucial role in cryptocurrencies such as Bitcoin, Ethereum, Ripple, etc. This is because most cryptocurrency operates majorly on the decentralization principle. All data are linked together in a chain of blocks. Without consensus from the network, data cannot be altered or removed.
The method by which these new blocks are generated is critical to understanding why Blockchain is regarded as very secure. Before adding a new block to the ledger, the majority of the nodes must check and certify the legitimacy of the new data.
As a result, Blockchain technology can be used to establish an immutable ledger for recording orders, payments, accounts, and other transactions.
The first real-life application or implementation of Blockchain technology was the discovery of Bitcoin in 2009 by a person or group called Satoshi Nakamoto.
But before the invention of Bitcoin hypothesis of how to make a direct online payment from one person to another without the involvement of a third party was proposed in the book or paper “Bitcoin: A Peer-to-Peer Electronic Cash System,”—published by Nakamoto in 2008.
This technology would solve the problem of double spending because it is based on cryptographic proof instead of trust. With this, a network can examine the transaction history of an electronic coin that a user submits for payment and confirm that the coin has not already been spent.
Since Bitcoin’s launch, Blockchain technology has become a major talking point in the business world. The term is often used interchangeably with cryptocurrency; however, its application is far more than just cryptocurrency.
With its wide range of applications, many companies, non-profit organizations, and government agencies are using Blockchain technology to improve existing processes and even create new business models due to Blockchain’s secure nature.
Many companies are still seriously testing how and why they can adopt modern Blockchain technology in their companies.
Below are benefits any company or business should consider in order to inform their decision.
Security is an essential factor that any company considers before venturing into a particular business, especially those dealing with transactions.
In the Blockchain, security is high, if not 100 percent guaranteed. This security stems from how the system works.
Each data or transaction, known as a block, is always stored linearly and chronologically through a cryptographic mechanism. After a block has been successfully added to the end of the chain, it is impossible to go back and change or remove any already added data except that most networks or nodes reach a consensus to accept the change.
All network participants must agree on data accuracy, and all confirmed transactions are immutable because they are permanently recorded. A transaction cannot be deleted by anyone, not even the system administrator.
Data is an essential commodity in today’s world, and as such, individuals and companies go the extra mile to ensure its confidentiality.
Blockchain technology has made data privacy an easy task to achieve with lesser stress and capital. It enables an unprecedented number of individuals a measure of control over their own data.
A company can as well determine what amount of information data they can share and to own and the time frame the person will have access to the data.
Although all Bitcoin or any other cryptocurrency are traceable, it is the actual owner of the coin cannot be determined if it was purchased anonymously.
This is unlike the banking system, whereby all the customers that have an account with a particular bank are known, and all of their transactions are constantly monitored.
In the Blockchain, anytime an individual purchases or mines a coin, it automatically adds to the total amount of the coin in circulation, but the exact person that made the contribution cannot be determined.
Because of the Blockchain’s decentralized nature, all transactions can be viewed in two ways: having a personal node or using aBblockchainexplorer. This model allows everyone on the chain to see each transaction as they are being added.
This enables the data to be tracked wherever it goes.
Without Blockchain, each organization must maintain its own database. Transactions and data are recorded identically in different locations because Blockchain employs a distributed ledger.
All network participants with authorized access see the same data at the same time, ensuring complete openness.
This can be highly recommended for the government in order to ensure complete transparency in the electronic voting systems where there will be no need for a centralized authority to verify each vote.
Every transaction is immutably documented and time- and date-stamped. This allows members to authenticate each vote entered consensually and view the complete history of a transaction, virtually eliminating the possibility of fraud.
Many companies worldwide are seriously investigating how to implement Blockchain technology to their system to solve complex problems and improve the common practice of the centralization model.
Blockchain innovation can be applied in healthcare industries whereby patients’ medical records can be stored securely.
When a medical record is created and signed, it can be stored in the Blockchain, giving patients proof and assurance that the record cannot be altered.
These personal health records might be encoded and kept on the Blockchain with a private key, limiting access to certain persons and maintaining privacy.
Another example of Blockchain innovation to companies is using Blockchain explorer to check applicants’ resumes without the recruiters manually checking them. Studies have shown that a majority of job seekers falsify their resumes.
Blockchain builds trust between businesses and customers, especially where trust is lacking in a particular system.
Companies that incorporate Blockchain innovation into their organization tend to instil more trust in their customers because Blockchain has demonstrated beyond reasonable doubt that each user’s data are confidential and they get the exact value of what they worked for.
As a member of a members-only network, you can be confident that you are receiving accurate and timely data and that your confidential Blockchain records will only be shared with network members to whom you have specifically granted access.
Blockchain also ensures a safe means of payment without any cause for alarm because all data are traceable in the system. When companies make it clear to the public that they are in-cooperating Blockchain technology into a particular aspect of their companies, it easily boots the companies’ trustworthiness and thereby increases sales.
This is evident in the growth rate of many cryptocurrency platforms compared to many payments solution that was not using Blockchain technology.
6. Reducing Costs
Blockchain technology can help companies reduce costs in so many ways.
Blockchain can be integrated into an e-commerce website to help process and track orders; with this, the customer will be able to handle everything on his own till the goods get to his destination. With this, it has cut short a lot of manual labor that the companies are supposed to use, thereby reducing costs.
Another way Blockchain help companies to reduce cost is by reducing all the intermediaries, such as banks’ charges on each transaction due to its decentralized nature.
More broadly, Blockchain helps businesses save money by eliminating the need for middlemen, vendors, and third-party providers who have traditionally performed the processing that Blockchain can do.
Since each node has a copy of all transactions, the auditing, data collection, and reportingprocess are reduced, thereby reducing cost. Automation processes and less paperwork in Blockchain technology can save companies costs.
In Blockchain technology, data can easily be traced due to its distributed ledge mechanism. And this advantage of Blockchain can be highly utilized by differentcompanies in different ways.
Blockchain features members and nodes that allow data and information to be shared due to its decentralized nature. Other nodes are required to confirm and authorize all transactions between nodes. The details are then encrypted and sealed before entering the system.
With this feature, companies like Walmart have been using a point-of-sale inventory system, enabling the company to track information about sales in real time so it can quickly adapt its product mix to local needs and trends.
But now, with Blockchain technology, more traceability features can be added by integrating Blockchain distributed ledger to record the origin of raw materials and products in the supply chain.
Also, Amazon retail is also implementing distributed ledger technology in Blockchain to verify that all goods sold on the platform are authentic.
After registering with a certificate authority, Amazon sellers can map their global supply chains by allowing participants such as manufacturers, couriers, distributors, end users, and secondary users to add events to the ledger.
8. Enhanced Automation
The world has generally developed from analogue to digital as information and data are the other of the day. With so much data to be stored and processed on the web or computer, there is a need to change from having to input and process data one after the other. This can result in time wasting and more expenses along the way.
Smart contract bots are one of the many applications of Blockchain automation, which enables terms and conditions to be met automatically by two parties without trust issues. The smart contract is a computer code built into Blockchain to facilitate and negotiate contract agreements.
Blockchain automation benefits to companies can also be seen in robotics, whereby advanced encryption techniques such as cryptographic digital signatures and cryptographically secure public-key cryptography that form an integral part of the Blockchain.
The users can stay assured of the optimum security for data across shared channels.
The private key can be made accessible and used automatically by robots to process information independently with great accuracy and speed.
A decentralized Blockchain is an open network whereby participants do not need to know or trust each other to carry out transactions.
Decentralization has several advantages for businesses. To promote transparency in the decentralized food supply ecosystem, Walmart, for instance, has incorporated Blockchain technology into its food chain supply.
The company can now track the provenance and condition of its pork products imported from China thanks to the adoption of Blockchain. It can now track any problems in groups that originate from a certain place.
Companies that implement decentralized Blockchain technology tend to boom because it helps to eliminate third-party verification and guarantee customer trust because each customer has a copy of any activities carried out on the company’s website and the idea of no hidden charge is like a dream come true to customers even if it helped them to save just a penny.
One of the most essential applications of Blockchain technology is its payment solution. Blockchain’s immutable and decentralized ledger makes it easier to record transactions. This technology gives payment across all business networks to be trustworthy, secure, transparent and traceable.
This digital payment solution has enabled millions to make payments without intermediate bank involvement. This has greatly improved cash flow and easy payment solutions.
Big companies have adopted cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, etc., as a means of payment.
For example, in 2019, AT&T announced that it was the first mobile carrier to accept cryptocurrency payments. It does so via BitPay, a third-party payment processor.
Blockchain technology has come to stay, and its benefit and application to companies can never be overstated and overlooked.
Since the time Blockchain application came to real life in 2009, Its application has increased tremendously, ranging from the healthindustry, finance, commerce, agriculture, etc.
It has helped many companies to reduce costs and provide a secure platform for data privacy, saving time and manual labor due to its automation application.
Many companies are still conducting research on how to implement Blockchain applications into their old-structure businesses. Blockchain has obviously triggered companies to make the most of their scarce resources.